Rep. Paul Ryan warns governors on Obama health care plan

U.S. Rep. Paul Ryan, seen here at a City Club of Chicago event Monday, told the Tribune editorial board that he's told governors not to expect a high reimbursement rate for health care.

U.S. Rep. Paul Ryan, seen here at a City Club of Chicago event Monday, told the Tribune editorial board that he's told governors not to expect a high reimbursement rate for health care. (Nancy Stone)

Rick PearsonClout Street

The chairman of the U.S. House Budget Committee said Monday he has been warning governors not to count on high federal reimbursement rates for expanding Medicaid coverage to low-income families under President Barack Obama’s health-care reform.

U.S. Rep. Paul Ryan, the Janesville, Wis., Republican who was Mitt Romney’s running mate last year, also said deficit-stressed states like Illinois shouldn’t count on the federal government assuming bond liabilities.

Appearing before the Tribune editorial board, Ryan continued to push for the repeal and replacement of Obama’s signature health care reform law, contending its promises to hold down costs and allow people to keep their current doctors will not pan out.

One provision of the law, the bulk of which goes into effect next year, expands state Medicaid coverage to individuals earning less than 138 percent of the federal poverty level. In exchange, the federal government will provide 100 percent reimbursement for the expandedcoverage for three years, phasing down to 90 percent in 2020.

“The fastest thing that’s going to go when we’re cutting spending in Washington is a 100 or 90 percent match rate for Medicaid. There’s no way. It doesn’t matter if Republicans are running Congress or Democrats are running Congress. There’s no way we’re going to keep those match rates like that,” said Ryan, who added that he has spread the warning to Republican governors and the National Conference of State Legislatures.

In Illinois, state officials say the expansion would provide medical coverage to about 500,000 low-income residents. Gov. Pat Quinn’s office has said that the cost of the expansion is $2 billion, covered by the federal government for the first three years. At the 90 percent reimbursement level in 2020, the cost to the state would be $238 million a year.

Ryan also said there is no thought in Congress of doing anything to help Illinois’ deficit-troubled government by backing up its bond debt, even though it has the nation’s worst unfunded pension liability totaling more than $96 billion.

“I know that this is sensitive here in Illinois. Imagine what would happen if the federal government said to a state, ‘We will back up your bonds.’ All the liabilities of all the states would all of a sudden be implied in the federal books,” Ryan said.

Ryan initially said that federal authorization to allow states to file for bankruptcy was something “that should be revisited.”

“(But) it’s my understanding that might disrupt (bond) markets and make your cost of capital higher in the state and we don’t want to do that to you.”